A.M. Top News: No raise projected in Social Security benefits for 2011

Social Security recipients will have to manage another year without a raise in their benefits, the government is expected to announce this week.

The cost-of-living adjustments, or COLAs, are automatically set by an inflation measure adopted by Congress in 1973. But for the second consecutive year the rate failed to top numbers calculated in 2008, which leaves more than 58 million people without a raise since January 2009.

To determine a pay-increase, officials analyze inflation from the third quarter of each year — July, August and September — compared to the previous one. If inflation increases, Social Security recipients get higher payments but if there is a decrease, benefits stay the same.

Payments increased by 5.8 percent in 2009 — the largest jump in 27 years — due to a spike in energy prices the year before. But, as energy prices leveled out, the formula to determine cost-of-living adjustments failed to produce numbers exceeding the 2008 rate.